Universal credit: refusing legacy = deprivation of capital?

sheramber

justwhat said:

Muttleythefrog said:

justwhat said:

You have to take the various scenarios and there intention into consideration. Creating "non essential/fabricated Debt" or  "out of character debt" i would think would fail at tribunal. If it could be proved.

Fail in what regard.... because debt is not capital so there appears no issue there. It comes down to repaying it and as the legislation is written repayment of debt is never deprivation of capital. This is where the rules seem open to abuse even where the intent is clear to deprive of capital to retain or gain benefits.

There is the issue of "purchasing goods or services if the expenditure was reasonable in the circumstances of the person's case". One could consider using credit as expenditure.... however you can't deprive yourself of capital you don't have. So if someone spent £10k on a new watch using a credit card their declaration of capital would be exactly the same before and after the transaction unless the watch was considered capital but since it's a personal effect it probably wouldn't be. So the capital would be unchanged and then comes repayment of the debt presumably from windfall or inheritance etc. It's hard to understand therefore in a scenario like this how the unreasonable test would be applied to show DoC... unless notional capital is attributed to the debt created from the unreasonable expenditure (and if the rules were to change this is where I would make the change as it brings debt creation into line with standard spending for consideration of reasonableness).

If they used payment other than credit, such as with funds in their bank, it surely would be much more straightforward although there still would be questions to answer on motive and knowledge... there would be no issue of repaying debt.

I agree with above on the issue of someone else spending your money... that's either a criminal matter (someone using your account without your authorisation)... or would be treated as your spending one way or another (someone or you using your account with authorisation).

I also agree with above that habitually making particularly purchases while that may be considered would also be considered in the context of the individual's circumstances.... if someone had a habit of buying a new Sports car every 3 years while on their executor's salary but found themselves later on UC due to losing the job then they would be surely expected to adapt to those new circumstances and such spending be considered unreasonable (although caveat that if they used credit to purchase we end up in scenario above).

I cant believe you can get rid of large amounts of money by using credit then paying it off. The system would be open to limitless abuse , if you wanted to use that particular loophole/rule.  Mind you.... Do you actually ever get asked how the debt was created  when you make a credit repayment? 

" someone else spending your money" - sorry not very well explained. As an example , An executor providing an asset rather than a cash equivalent.

An executor must give what the will says. 

If it is a sum of money the executor cannot decide to give an item instead. 

If it an item the executor cannot decide to give a sum of money instead.